The Insolvency and Bankruptcy Board of India (IBBI) has powers to start probes against service providers registered with it without intimating them, according to new regulations.
IBBI, which is implementing the Insolvency and Bankruptcy Code (IBC), has notified the regulations for inspection and investigation of service providers registered with it.
Insolvency professional agencies, professionals, entities and information utilities are considered as service providers under the Code.
The Code, which provides for a market-determined and time-bound resolution of insolvency proceedings, became operational in December 2016.
As per the regulations, the investigation authority has to serve a notice intimating the entity concerned about the probe at least ten days in advance. However, the requirement could be done away with on grounds such as apprehensions that the records of the particular service provider might be destroyed before the probe starts.